Pivot points

Pivot points are tops and bottoms in the chart. Investtech has a unique system for identifying such points. By looking at charts where new bottoms have been identified, stocks that are going to rise can be identified very early.

It is a sign of increasing investor optimism when a stock reverses after falling for a long time. There will always be a delay in the market due to the fact that information is scattered and processed at different times. When someone has seen the opportunities and become positive, others will follow. The idea of the Pivot points tool is to identify such situations as early as possible, which will enable you to be among the first to trade when the investors’ mood changes.

Investtech has developed computer systems which identify such turning points in stocks. In order for a bottom point to be drawn in the chart and appear in the lists, the price must have moved significantly from the bottom. Two factors determine whether movement is considered significant; a) the change in percentage and b) the number of days in which this happened. If we see a major price change, it is enough if the movement lasted for a few days. If the price change is small, it must last for several days.

The Pivot points list is a stock picking tool. The most common usage is looking at stocks with new price chart bottoms in one’s investment time frame. Candidates identified in this way should then be put through the usual chart analysis. It is especially important to study volume. A price movement on increasing volume is considered much more reliable than one on low or unchanged volume. A price movement in the same direction as the trend will be considered more reliable than one moving in the opposite direction.

Days since identification: Number of stock exchange days since Investtech’s systems identified the pivot point.

Days since: Number of days since the pivot point.

Pivot point: The price at the pivot point.

This page is part of Investtech's help and training program.

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